The stock market fall came despite growing expectations for eased trade tension between the United States and China after Chinese President Xi Jinping sent a message to U.S. President Donald Trump marking 40 years since the establishment of diplomatic relations, highlighting bilateral cooperation. Investor sentiment nevertheless stayed tepid for Korean stocks.

The Kospi fell to as low as 2004.27 on Wednesday, threatening to dip below the 2,000 level for the first time in two months. The last time Kospi nosedived to below the psychologically significant threshold of 2,000 was on October 29.

Hong Chun-ok, researcher at Kiwoom Investment and Securities Co., said that earnings outlook for Kospi-listed companies was revised down from 226 trillion won ($201.8 billion) in early 2018 to 204 trillion won in December.